The last decade has been a period of sustained structural change for the hospitality and leisure industry, and that change is ongoing. Understanding the nature of that change and what it requires from operators is essential to achieve success.
Some clear trends are shaping the future of the industry, requiring creativity and innovation, allied to timeless hospitality values of service excellence and human connection.
What are the key trends shaping the hospitality and leisure industry as we move into the second half of the 2020s?
Let’s dive in.
Finding Difference in a Competitive Market
While global travel demand has largely recovered since the shock of the pandemic, competitive pressures have continued to intensify. Online travel agencies (OTAS), price comparison tools, and review platforms have all shaped guest expectations. How travelers discover, evaluate, and book accommodation is continually changing.
The ubiquity of third-party booking platforms exerts a downward pressure on prices, with ratings and availability being as important considerations as brand identity. This is leading to an erosion of identity, with properties often appearing interchangeable.
This loss of differentiation is a source of increasing concern for hospitality leaders. This is reflected in PwC’s Global CEO survey, where hospitality and leisure industry executives report lower confidence in revenue growth compared to CEOs in other industries.
To remain competitive, hotels need to reposition themselves as unique destinations rather than transactional commodities. Brands that can offer personalized experiences and a deeper emotional engagement can stand out, driving loyalty and repeat bookings.
The Impact of OTAs on Brand Identity and Guest Loyalty
OTAs have delivered a range of benefits to the hospitality and leisure industry, impacting every segment from budget travel to sustainable tourism, and shaping luxury travel trends.
However, increasing reliance on OTA platforms by both businesses and travelers has diluted brand visibility. When customers conduct a search, hotels are presented side-by-side in numbers, with brand narratives being replaced by star ratings, guest reviews, and price filters.
What was once something that was checked as verification after an initial connection with the brand had been made is now a key metrics that guide the selection process. This shift increases the pressure on operators to compete primarily on cost, undermining margins and weakening long-term brand presence.
Consumer reviews exert greater influence than brand promises. This is particularly the case with younger travelers who are making up an increasing segment of the tourism market. Younger Millennial and Gen Z travelers prioritize peer validation over traditional marketing.
To overcome this OTA-driven trend, hotels need to invest in unique experiences that increase brand loyalty and drive direct bookings. Personalized experiences in hospitality are increasingly popular, and something that cannot easily be discovered via OTA platforms.
Differentiation is an operational strategy with growing importance for the hospitality and leisure industry.
Personalization as a Hospitality and Leisure Trend
Personalization has the potential to become a game-changing response to the tech-driven pressure towards commoditization.
Guests are raising their expectations when it comes to hospitality experience. Personalized services have moved from being a luxury feature to a key expectation, particularly in luxury market segments and among younger travelers.
This last sector is particularly significant, as younger generations make up a fast growing segment of the overall travel market.
Research from EHL shows that 73 percent of companies with above-average customer experience achieve stronger financial performance than their peers. Within the hospitality and leisure industry, personalization supports the emotional connections that remain one of the strongest drivers of loyalty.
Personalized experiences in hospitality might include:
- Remembering guest preferences across stays
- Tailoring services to the purpose of traveling
- Adapting communication tone and timing
- Recognizing key moments such as anniversaries, birthdays, or return visits
Personalization is now a core component of luxury travel trends, where relevance and attentiveness are as important as the luxury experience.
Meeting New Guest Expectations
Service modernization is a defining feature of contemporary hospitality and leisure industry trends. Hotels are creatively rethinking physical spaces and service models to better reflect the new ways that guests travel, work, and live.
Business travelers are increasingly seeking flexible environments, enabling a softer division between work and leisure. Hotels have responded by expanding traditional business centers into co-working spaces, sometimes opening them to local communities.
This provides a space in which genuine connections can be made between local businesses and travelers, opening up the possibility of productive partnerships and driving economic growth.
Technology is also playing an important role in service delivery. Automated room deliveries, mobile service requests, and digital concierge tools are becoming more common. EHL’s 2025 research shows that hotels are investing in AI, predictive analytics, and contactless services to enhance both guest experience and operational efficiency.
While this aids convenience, the key to differentiation will depend on how they are implemented. Services need to be as good as, or better than the nearest competitors. While early adoption of new tools and AI in hospitality might give you a temporary advantage, it’s unlikely to be sustained.
Personalization and Value
Another important trend is services being unbundled. Rather than all amenities being built into the room rate, operators offer optional upgrades. This allows guests to only pay for what they value.
Alternatively, hotels might partner with local spas, gyms, or workspaces to build a community-based service ecosystem without the need for upfront capital investment.
In addition, boutique cultural experiences, wellness tourism, and authentic local experiences offer a different model to all-inclusive resorts and are tailored towards the growing trend in guest expectations for a personalized vacation itinerary.
Human Differentiation: The Importance of Interaction
Despite the onward march of technology, human interaction remains central to creating a memorable hospitality experience. Guests are more likely to remember attentive, helpful, and friendly staff than the features of their room.
Getting guest/staff interactions right requires tact and experience, the latter of which is undermined by low retention rates. While smart hotels and other technological advancements may alleviate staffing issues, addressing long-term problems in the sector is a priority.
Low wages, high turnover, and an ongoing perception of hospitality as a temporary career path make service consistency difficult. The talent shortage in hospitality has been examined extensively by EHL researchers, who highlight the need for better career pathways, skills development, and workplace culture.
Investing in people helps to address these challenges. This can include:
- Competitive compensation
- Clear career progression
- Ongoing training
- Adequate staffing levels
Another element of building a resilient, flexible, and responsive workforce is cross-training. Team members learn about each other’s roles, giving them the confidence to solve a problem immediately, rather than redirecting the guest.
Emotional connection is increasingly important in luxury travel trends, making personalized, responsive service essential. Achieving this kind of service level requires well-trained, committed, and experienced staff.
Technology as a Tool, Not a Replacement
The adoption of innovative technologies is accelerating across the hospitality and leisure industry, but its purpose needs to be clearly defined. The role of technology should be to reduce friction, not replace human service nor as a cost-cutting measure.
Systems that automate routine administrative tasks such as check-in, billing, scheduling, and reporting, can free employees to spend more time with guests.
AI in hospitality has the potential to be particularly influential. AI-enabled systems can continuously analyze data and identify patterns that humans may miss. This has particular relevance to customer relationship management.
When integrated into CRM and loyalty programs, AI can support:
- Preference recognition
- Predictive service suggestions
- Personalized offers
- Timely guest communication
For example, repeat stays, birthdays, or anniversaries may be identified, allowing hotels to deliver thoughtful gifts that strengthen the emotional connection between the customer and brand.
Smart Hotels and the Internet of Things
The rise of smart hotels is part of a broader development of the Internet of things across the hospitality sector. Interconnected devices allow hotels to optimize their guest experience and enhance operational efficiency.
Some examples of this in practice include:
- Smart climate and lighting controls
- Occupancy-based energy management
- Predictive maintenance systems
- Connected in-room entertainment
For guests, these innovations give them greater control and enhance their overall comfort. For the operator, they can reduce energy consumption, support sustainable tourism goals, and improve site and asset management.
As sustainability becomes an increasingly important factor in the decision-making process for travelers, smart infrastructure can support environmental responsibility while reducing costs.
Sustainability and Purpose-Driven Travel
With growing public concern over the environmental consequences of mass travel, sustainable tourism is a defining force in the contemporary hospitality and leisure industry.
Guests now expect hotels to take environmental and social responsibility seriously, particularly in premium and wellness tourism sectors.
So, what does this mean in practice?
Sustainability initiatives often include:
- Reducing energy and water consumption
- Minimizing waste
- Supporting local supply chains
- Engaging with local communities
These efforts resonate strongly with travelers looking for authentic local experiences and cultural experiences beyond a transitory tourist encounter.
Hospitality operators that can integrate wellness, nature, and sustainability often appeal to high-value customers such as retreat travelers and long-stay guests.
Wellness, Spa Hotels, and Experience-Led Travel
Wellness tourism is a growing industry segment as travelers prioritize mental and physical well-being. Experience-focused hospitality businesses and spa hotels are developing high-quality services for a growing and increasingly discerning clientele.
The wellness sector now extends well beyond traditional spa services and may include:
- Mindfulness and fitness programs
- Nutrition-focused dining
- Sleep optimization
- Nature-based experiences
Similarly, demand for adventure travel and immersive activities reflects a broader shift towards experience-led travel.
Guests are now seeking stories, connection, and personal well-being, reinforcing the need for hotels to develop experiences that extend beyond comfortable accommodation.
Loyalty in the Hospitality and Leisure Industry
According to PwC’s 2025 CEO Survey, 46% of executives believe their current loyalty programs will become irrelevant within three years, highlighting the urgent need for hotels to rethink traditional approaches to building brand affinity and guest retention.
Guests are increasingly motivated by relevance and recognition, and a sense of meaningful connection with hospitality brands, rather than transactional rewards.
Effective CRM and loyalty programs often focus on:
- Personal recognition
- Tailored offers
- Seamless omnichannel engagement
Within the hospitality and leisure industry, loyalty is earned through trust, authenticity, and consistency. CRM and loyalty programs should support long-term relationships rather than one-off bookings. Hotels that can build emotional loyalty strengthen direct booking and reduce reliance on OTAs, easing downward pressure on pricing.
Technology, Talent, and Experience as a Unified Strategy
Achieving genuine differentiation in this complex hospitality landscape will require a unified strategy that brings together talent and experience, supported by the intelligent use of technology. Service design, people, and tech tools need to work together.
Successful operators are likely to align:
- AI in hospitality with human service
- Smart hotels with sustainability goals
- Personalized experiences in hospitality with operational discipline
Taking an integrated approach will enable hotels to adapt to changing hospitality and leisure trends while maintaining a clear brand identity.
The Future of Differentiation in the Hospitality and Leisure Industry
The hospitality and leisure industry faces growing complexity, but also significant opportunities. As competition intensifies alongside evolving guest expectations, differentiation becomes more important.
Whether responding to luxury travel trends, supporting sustainable tourism, or leveraging the internet of things, the goal must be to create meaningful, memorable experiences that guests want to choose again and again.
In an industry built on human connection and authentic experiences, differentiation ultimately means understanding people and shaping services that feel genuinely designed for them.
